ACIT 25(2), MUMBAI V. BIPIN N. SAGAR, MUMBAI

ITA 1507/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5186 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 03-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset
• Section: 143(3); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1507/M/2017 ASSESSMENT YEAR: 2011-12 ACIT - 25(2), R.NO.508, C-10, 5 TH FLOOR, PRATYAKSHKAR BHAVAN, BKC BANDRA (E), MUMBAI - 400051 VS. MR. BIPIN N. SAGAR, 701/7, GLEN EAGLE, GULMOHAR ROAD, OPP. IRLA MASJID, JVPD, ANDHERI (W), MUMBAI 400 049 PAN: (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI JAGDISH T. PUNJABI, A.R. SHRI RITU J. PUNJABI, A.R. REVENUE BY : SHRI SUNIL KUMAR AGARWAL, D.R. DATE OF HEARING : 15.01.2019 DATE OF PRONOUNCEMENT : 05.02.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 28.04.2014 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN VARIOUS GROUNDS OF APPEAL IS AGAINST THE ORDER OF LD. CIT(A) DIRECTING THE AO TO DELETE THE DISALLOWANCE OF RS.1,88,18,852/- OF EXE MPTION UNDER SECTION 54 OF THE ACT WHICH WAS DISALLOWED BY THE A O ON THE GROUND THAT THE ASSESSEE HAS PURCHASED AND SOLD THR EE FLATS BY ITA NO.1507/M/2017 MR. BIPIN N. SAGAR 2 THREE SEPARATE AGREEMENTS FOR FLAT NO.701, 702 & 70 3 AT GLEN EAGLE AND THEREAFTER CONVERTED THEM INTO ONE. 3. THE FACTS IN BRIEF ARE THAT THE AO OBSERVED ON T HE BASIS OF DETAILS FILED BY THE ASSESSEE THAT ASSESSEE HAS SOL D THREE FLATS I.E. FLAT NO.701, 702 & 703 AT GLEN EAGLE AND CLAIMED EX EMPTION UNDER SECTION 54 OF THE ACT. THE AO ACCORDINGLY IS SUED SHOW CAUSE NOTICE DATED 19.02.2014 WHICH WAS REPLIED BY THE ASSESSEE VIDE LETTER DATED 28.02.2014 SUBMITTING TH EREIN THAT ALL THE FLATS WERE LOCATED ON THE SAME FLOOR WHEN PURCH ASED AND LATER ON THE SAME WERE COMBINED AND CONVERTED INTO ONE FLAT. THE ASSESSEE SUBMITTED BEFORE THE AO THAT DUE TO LE GAL FORMALITIES, THESE WERE PURCHASED BY THREE SEPARATE AGREEMENTS AND WHEN SOLD THE ASSESSEE ENTERED INTO THREE AGREE MENTS AGAIN. THE ASSESSEE FULLY COMPLIED WITH ALL THE C ONDITIONS AS ENVISAGED IN THE SECTION 54 OF THE ACT. THE AO RE JECTED THE SUBMISSIONS OF THE ASSESSEE ON THE GROUND THAT THER E WERE THREE SEPARATE AGREEMENTS FOR PURCHASE/SALE FOR THESE FLA TS AND ASSESSEE WAS PAYING MAINTENANCE CHARGES FOR EACH OF THE FLAT I.E. 701, 702 & 703. THE AO FURTHER NOTICED THAT AS PER THE PROVISIONS OF SECTION 540, THE DEDUCTION UNDER SECT ION 54 OF THE ACT IS ALLOWABLE IF THE CAPITAL GAIN HAS ARISEN FRO M TRANSFER OF LONG TERM CAPITAL ASSET BEING BUILDING OR LANDS THE RETO BEING A RESIDENTIAL HOUSE. HOWEVER, IN THE PRESENT CASE TH E AO OBSERVED THAT THE ASSESSEE SOLD THREE FLATS BY WAY OF THREE SEPARATE AGREEMENTS. ACCORDINGLY, THE AO ALLOWED THE DEDUCT ION IN RESPECT OF LONG TERM CAPITAL GAIN IN RESPECT OF FLA T NO.701 WHICH WAS SHOWN AS THE RESIDENTIAL ADDRESS IN THE ELECTRI CITY BILL OF THE ASSESSEE AND DISALLOWED THE LONG TERM CAPITAL GAIN OF RS.78,80,279/-, IN RESPECT OF FLAT NO.702 RS.1,09,3 8,573/- AND ITA NO.1507/M/2017 MR. BIPIN N. SAGAR 3 RS.1,88,18,852/-IN RESPECT OF FLAT NO.703 BY FRAMIN G ASSESSMENT UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 21 .03.2014. THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE B Y OBSERVING AND HOLDING AS UNDER: 5.5 I HAVE CONSIDERED THE SUBMISSION OF THE APPELL ANT AND OBSERVATION OF THE A.0,DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS STATED THAT THE TRANSFER IS OF ONE RESIDENTIAL HOUSE. THE THREE ADJOINING FLATS WERE MERGED AND MADE IT ONE RESIDENTIAL HOUSE NOT BY THE APPELLANT BUT BY PREVI OUS OWNER. THE APPELLANT EVER SINCE THE DATE OF PURCHASE USED IT AS ONE RESIDENTI AL HOUSE. THERE IS ONE ELECTRICITY METER IN RESPECT OF THE THREE FLATS. AS AGAINST A LONG TERM CAPITAL GAIN OF RS. 3,00,46,935, ARISING ON TRANSFER OF A RESIDENTIAL H OUSE, THE APPELLANT HAS BEFORE THE DUE DATE OF FILING RETURN OF INCOME DEPOSITED A SUM OF RS. 3,50,00,000 IN AN ACCOUNT OPENED UNDER THE CAPITAL GAINS ACCOUNT SCHEME. 5.6 GENERALLY, IT MAY NOT BE POSSIBLE TO FIND A BIG GER RESIDENTIAL UNIT AND THAT REQUIRES COMBINING TWO OR MORE ADJOINING FLATS INTO ONE UNIT. HOWEVER, THAT DOES NOT MEAN THAT EACH FLAT IS IN ITSELF A SEPARATE RES IDENTIAL UNIT. WHAT IS TO BE SEEN IS WHETHER THE ADJOINING FLATS WERE ACTUALLY UNITED AN D USED AS A COMMON SINGLE UNIT OR NOT. EXECUTION OF SEPARATE AGREEMENTS CANNOT DEC IDE THIS ISSUE. THE FLATS WERE CONSTRUCTED IN SUCH A WAY THAT ADJUSTMENT UNITS OF FLATS CAN BE COMBINED INTO ONE. THE ACQUISITION OF FLATS MAY BE DONE INDEPENDENTLY BUT EVENTUALLY THERE IS A SINGLE UNIT AND HOUSE FOR THE PURPOSE OF RESIDENCE. RECENT LY, THE JURISDICTIONAL HON'BLE BOMBAY HIGH COURT IN THE CONTEXT OF SECTION 54 OF T HE ACT, IN CIT VS. DEVDASNAIK [2014] 49 TAXMANN.COM 30 (BOMBAY) DECIDED SIMILAR I SSUE AS UNDER: 'WE ARE UNABLE TO AGREE. WE FOUND THAT THE EVIDENCE BASED ON WHICH THE CLAIM WAS GRANTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE INCOME TAX APPELLATE TRIBUNAL HAS BEEN NOTED BY THE TRIBUNAL IN PARAGRAPH 4 OF ITS ORDER. PRIOR THERETO, THE FACTUAL POSITION HAS ALSO BEEN NOTICED THAT THE ASSESSEE ALONGWITH HIS WIFE JOINTLY OWNED BUNGA LOW. THE BUNGALOW WAS SOLD AT RS.3/-CRORES. WITH THIS SUM, THEY BOUGHT TH REE FLATS, ONE IN THE ASSESSEE'S NAME, ANOTHER IN THE NAME OF ASSESSES AN D HIS WIFE AND THIRD IN THE NAME OF THE WIFE. THE ASSESSEE CLAIMED DEDUCTIO N UNDER SECTION 54 ON PURCHASE OF TWO FLATS IN WHICH HE IS EITHER A SOLE OWNER OR A JOINT OWNER. THOUGH THESE FLATS WERE ACQUIRED UNDER TWO DISTINCT AGREEMENTS AND FROM DIFFERENT SELLERS, WHAT HAS BEER, NOTED BY THE TRIB UNAL AS ALSO THE COMMISSIONER OF INCOME TAX (APPEALS) IS THAT THE MA P OF THE GENERAL LAYOUTPLAN AS WELL AS INTERNAL LAYOUT PLAN IN REGAR D TO FLAT NOS. 103 AND 104 INDICATE THAT THERE IS ONLY ONE COMMON KITCHEN FOR BOTH THE FLATS. THE FLATS WERE CONSTRUCTED IN SUCH A WAY THAT ADJACENT UNITS OR FLATS CAN BE COMBINED INTO ONE. HOWEVER, ADMITTED FACT IS THAT THE FLATS WERE CONVERTED INTO ONE UNIT AND FOR THE PURPOSE OF RESIDENCE OF THE ASSESS EE. IT IS IN THESE CIRCUMSTANCES, THE COMMISSIONER HELD THAT THE ACQUI SITION OF THE FLATS MAY HAVE BEEN DONE INDEPENDENTLY BUT EVENTUALLY THEY AR E A SINGLE UNIT AND HOUSE FOR THE PURPOSE OF RESIDENCE. ITA NO.1507/M/2017 MR. BIPIN N. SAGAR 4 THIS FACTUAL FINDING COULD HAVE BEEN MADE THE BASIS FOR RECORDING A CONCLUSION IN FAVOUR OF THE ASSESSEE. WE DO NOT FIN D THAT SUCH A CONCLUSION CAN BE TERMED AS PERVERSE. RELIANCE PLACED BY THE T RIBUNAL ON THE ORDER PASSED BY IT IN THE CASE OF MSSUSHILA M. JHAVERI (S UPRA) AND WHICH REASONING FOUND FAVOUR WITH THIS COURT IS NOT ERRONEOUS OR MI SPLACED. THE LANGUAGE OF THE SECTION HAS BEEN NOTED IN BOTH THE DECISIONS AN D IT HAS BEEN HELD THAT SO LONG AS THERE IS A RESIDENTIAL UNIT OR HOUSE, TH EN THE BENEFIT OR DEDUCTION CANNOT HE DENIED. IN THE PRESENT CASE, THE UNIT WAS A SINGLE ONE. THE FLATS WERE CONSTRUCTED IN SUCH A WAY THAT THEY COULD BE C OMBINED INTO ONE UNIT. ONCE THERE IS A SINGLE KITCHEN THEN, THE PLANS CAN BE RELIED UPON. WE DO NOT THINK THAT THE CONCLUSION IS IN ANY WAY IMPOSSIBLE OR IMPROBABLE SO AS TO ENTERTAIN THIS APPEAL. IN THIS PECULIAR FACTUAL BAC KDROP, THIS APPEAL DOES NOT RAISE ANY SUBSTANTIAL QUESTION OF IAW. THE APPEAL I S DEVOID OF ANY MERIT AND IS DISMISSED. NO ORDER AS TO COSTS.' FURTHER, HON'BLE ALLAHABAD HIGH COURT HAS IN THE CA SE OF SHIV NARAINCHOUDHARY V. CWT (108 ITR 104) HELD THAT - 'SELF CONTAINED DWELLING UNITS WHICH ARE CONTIGUOUS AND SITUATED IN THE SAME COMPOUND AND WITHIN A COMMON BOUNDRY AND HAVIN G UNITY OF STRUCTURE COULD BE REGARDED AS ONE HOUSE. 5.7 FURTHER, THERE IS NO RESTRICTION PLACED IN SEC TION 54 THAT EXEMPTION IS ALLOWABLE ONLY IN RESPECT OF SALE OF ONE RESIDENTIA L HOUSE. THERE IS AN INBUILT RESTRICTION THAT CAPITAL GAIN ARISING FROM SALE OF RESIDENTIAL HOUSE CANNOT BE INVESTED IN MORE THAN ONE RESIDENTIAL HOUSE. HOWEVER THERE I S NO RESTRICTION THAT CAPITAL GAIN ARISING FROM SALE OF MORE THAN ONE RESIDENTIAL FLAT CANNOT BE INVESTED IN ONE RESIDENTIAL HOUSE. THE PROPOSITION THAT THE LONG TE RM CAPITAL GAIN ARISING ON TRANSFER OF MULTIPLE RESIDENTIAL HOUSES CAN BE INVESTED IN P URCHASE / CONSTRUCTION OF ONE RESIDENTIAL HOUSE. IT IS ALSO SUPPORTED BY THE DECI SION OF THE JURISDICTIONAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT V. RANJIT VITHALDA S [2012] 23 TAXMANN.COM 226 (ITAT-MUM)] (ITA NO. 7443 (MUM) OF 2002; AY 1998-99 ; ORDER DATED 22.6.2012). IT IS HELD THAT NO RESTRICTION PLACED IN SECTION 54 TH AT EXEMPTION IS ALLOWABLE ONLY IN RESPECT OF SALE OF ONE RESIDENTIAL HOUSE. EVEN IF T HE ASSESSEE SELLS MORE THAN ONE RESIDENTIAL HOUSES IN THE SAME YEAR AND THE CAPITAL GAIN IS INVESTED IN A NEW RESIDENTIAL HOUSE, THE CLAIM OF EXEMPTION CANNOT BE DENIED IF THE OTHER CONDITIONS OF SECTION 54 ARE FULFILLED. THIS ASPECT HAD BEEN E XAMINED BY THE MUMBAI BENCH OF THE TRIBUNAL IN RAJESH KESHAV PILLAI V, ITO (2011) 44 SOT 617 (MUM.) IN WHICH IT HAS BEEN HELD THAT EXEMPTION U/S 54 WILL BE AVAILABLE I N RESPECT OF TRANSFER OF ANY NUMBER OF LONG TERM CAPITAL ASSETS BEING RESIDENTIA L HOUSES IF OTHER CONDITIONS ARE FULFILLED. NO RULINGS HAVE BEEN BROUGHT ON RECORD B Y THE ID. DR TO SHOW THAT THE CAPITAL GAIN ARISING FROM SALE OF MORE THAN ONE RES IDENTIAL HOUSES CANNOT BE INVESTED IN ONE RESIDENTIAL HOUSE. THE PROVISIONS O F SECTION 54 AS POINTED OUT EARLIER APPLY TO TRANSFER OF ANY NUMBER OF RESIDENT IAL HOUSES BY THE ASSESSEE PROVIDED THE CAPITAL GAIN ARISING THERE FROM IS INV ESTED IN A RESIDENTIAL HOUSE. THE EXEMPTION U/S 54 IS AVAILABLE IF CAPITAL GAIN ARISI NG FROM TRANSFER OF A RESIDENTIAL HOUSE IS INVESTED IN A NEW RESIDENTIAL HOUSE WITHIN THE PRESCRIBED TIME LIMIT. THE RELEVANT PARA ARE AS UNDER:- ITA NO.1507/M/2017 MR. BIPIN N. SAGAR 5 HAVING HELD THAT THE TWO FLATS WERE TWO DIFFERENT R ESIDENTIAL HOUSES, IT IS REQUIRED TO BE EXAMINED WHETHER THE ASSESSEE IS ENT ITLED FOR EXEMPTION U/S 54 OF THE ACT IN RESPECT OF THE SALE OF MORE THAN O NE RESIDENTIAL HOUSES. WE SEE NO RESTRICTION PLACED IN SECTION 54 THAT EXEMPT ION IS ALLOWABLE ONLY IN RESPECT OF SALE OF ONE RESIDENTIAL HOUSE. EVEN IF T HE ASSESSEE SELLS MORE THAN ONE RESIDENTIAL HOUSES IN THE SAME YEAR AND THE CAP ITAL GAIN IS INVESTED IN A NEW RESIDENTIAL HOUSE, THE CLAIM OF EXEMPTION CANNO T BE DENIED IF THE OTHER CONDITIONS OF SECTION 54 ARE FULFILLED. THIS ASPECT HAD BEEN EXAMINED BY THE MUMBAI BENCH OF THE TRIBUNAL IN RAJESH KESHAV PILLA I V. ITO (2011) 44 SOT 617 (MUM.) IN WHICH IT HAS BEEN HELD THAT EXEMPTION U/S 54 WILL BE AVAILABLE IN RESPECT OF TRANSFER OF ANY NUMBER OF IONS TERM C APITAL ASSETS BEING RESIDENTIAL HOUSES IF OTHER CONDITIONS ARE FULFILLE D. THE LEARNED DR APPEARING FOR THE REVENUE HAS PLACED RELIANCE ON THE JUDGMENT OF THE HON'BLE HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF PAWAN AR YA V. CIT (237 CTR 210) SUPRA TO ARGUE THAT THE CLAIM OF EXEMPTION IS NOT A VAILABLE IN RESPECT OF SALE OF MORE THAN ONE RESIDENTIAL HOUSE. ON CAREFUL PERU SAL OF THE SAID JUDGMENT, WE FIND THAT NO SUCH PROPOSITION HAS BEEN LAID DOWN IN THAT CASE. THE HON'BLE HIGH COURT IN THE SAID CASE, HAVE ONLY HELD THAT THE CAPITAL GAIN ARISING FROM THE TRANSFER OF A RESIDENTIAL HOUSE IS NOT ADMISSIBLE AGAINST THE INVESTMENT IN SECOND HOUSE. THUS, THE ONLY RESTRICT ION IS THAT THE CAPITAL GAIN ARISING FROM THE SALE OF ONE RESIDENTIAL HOUSE MUST BE INVESTED IN ONE RESIDENTIAL HOUSE AND NOT IN TWO RESIDENTIAL HOUSES . ANOTHER IMPORTANT ASPECT WHICH NEEDS TO BE EXAMINED IS WHETHER THE EXEMPTION U/S 54 WILL BE AVAILABLE, IN CASE, CAPITA L GAIN ARISING FROM SALE OF MORE THAN ONE RESIDENTIAL HOUSE, IS INVESTED IN ONE RESIDENTIAL HOUSE. THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE ARGUED T HAT THERE WAS NO RESTRICTION UNDER SECTION 54 THAT CAPITAL GAIN ARIS ING FROM TWO RESIDENTIAL HOUSES CANNOT BE INVESTED IN ONE RESIDENTIAL HOUSE. WE FIND SUBSTANCE IN THE ARGUMENT ADVANCED BY THE ID. COUNSEL FOR THE AS SESSEE. NO RULINGS HAVE BEEN BROUGHT ON RECORD BY THE ID DR TO SHOW THAT TH E CAPITAL GAIN ARISING FROM SALE OF MORE THAN ONE RESIDENTIAL HOUSES CANNO T BE INVESTED IN ONE RESIDENTIAL HOUSE. THE PROVISIONS OF SECTION 54 AS POINTED OUT EARLIER APPLY TO TRANSFER OF ANY NUMBER OF RESIDENTIAL HOSES BY T HE ASSESSEE PROVIDED THE CAPITAL GAIN ARISING THERE FROM IS INVESTED IN A RE SIDENTIAL HOUSE. THE EXEMPTION U/S 54 IS AVAILABLE IF CAPITAL GAIN ARISI NG FROM TRANSFER OF A RESIDENTIAL HOUSE IS INVESTED IN A NEW RESIDENTIAL HOUSE WITHIN THE PRESCRIBED TIME LIMIT. THUS THERE IS AN INBUILT RES TRICTION THAT CAPITAL GAIN ARISING FROM THE SALE OF ONE RESIDENTIAL HOUSE CANN OT BE INVESTED IN MORE THAN ONE RESIDENTIAL HOUSE. HOWEVER, THERE IS NO RE STRICTION THAT CAPITAL GAIN ARISING FROM SALE OF MORE THAN ONE RESIDENTIAL HOUS ES CANNOT BE INVESTED IN ONE RESIDENTIAL HOUSE. IN CASE CAPITAL GAIN ARISING FROM SALE OF MORE THAN ONE RESIDENTIAL HOUSES IS INVESTED IN ONE RESIDENTI AL HOUSE, THE CONDITION THAT CAPITAL GAIN FROM SALE OF A RESIDENTIAL HOUSE SHOULD BE INVESTED IN A NEW RESIDENTIAL HOUSE SETS FULFILLED IN EACH CASE INDIV IDUALLY BECAUSE THE CAPITAL GAIN ARISING FROM SALE OF EACH RESIDENTIAL HOUSE HA S BEEN INVESTED IN A RESIDENTIAL HOUSE. THEREFORE, EVEN IF TWO FLATS ARE SOLD IN TWO DIFFERENT YEARS AND THE CAPITAL GAIN OF BOTH THE FLATS IS INVESTED IN ONE RESIDENTIAL HOUSE, EXEMPTION U/S 54 WILL BE AVAILABLE IN CASE OF SALE OF EACH FLAT PROVIDED THE ITA NO.1507/M/2017 MR. BIPIN N. SAGAR 6 TIME LIMIT OF CONSTRUCTION OR PURCHASE OF THE NEW R ESIDENTIAL HOUSE IS FULFILLED IN CASE OF EACH FLAT SOLD.' (EMPHASIS SUP PLIED) 6. IT IS CLEAR FROM DISCUSSION, SUBMISSIONS AND LEG AL DECISION THAT THE APPELLANT HAS SOLD HIS RESIDENTIAL HOUSE BEING FLAT NO.701, 702 A ND 703 IN GLEN EAGLE BUILDING FOR TOTAL SALE CONSIDERATION OF RS.4,50,00,000/-. THE A PPELLANT HAS INVESTED RS,3,50,0000/- IN CAPITAL GAIN ACCOUNT WITH THE ORI ENTIAL BANK OF COMMERCE BEFORE DUE DATE FOR FILING OF RETURN OF INCOME. THE FLATS WERE CONSTRUCTED IN SUCH A WAY THAT THEY COULD BE COMBINED INTO ONE UNIT FOR THE P URPOSE OF RESIDENCE. THE ACQUISITION OF FLATS HAVE BEEN DONE INDEPENDENTLY B UT EVENTUALLY THEY ARE SINGLE UNIT FOR THE PURPOSE OF RESIDENCE. EXECUTION OF SEP ARATE AGREEMENTS CANNOT DECIDE THIS ISSUE. IN THE APPELLANT'S CASE, THE AO HAS NOT DISPUTED THE EVIDENCE PLACED BEFORE HIM TO PROVE THAT THESE THREE ADJOINING FLAT S WERE IN FACT UNITED AS ONE SINGLE UNIT HAVING ONE KITCHEN HOWEVER, THERE IS NO RESTRICTION PLACED ANYWHERE IN SECTION 54 THAT EXEMPTION IS AVAILABLE IN RELATION TO SALE OF ONE RESIDENTIAL HOUSE. THE PROVISION OF SECTION 54 IS APPLIED TO TRANSFER OF ANY NUMBER OF RESIDENTIAL HOUSE BY THE ASSESSE, PROVIDED THE CAPITAL GAIN ARISING T HERE FROM IS INVESTED IN A PROPER MANNER WITHIN THE PRESCRIBED TIME LIMIT. THE APPELL ANT HAS INVESTED RS.3,50,0000/- IN CAPITAL GAIN ACCOUNT WITH THE ORIENTIAL BANK OF COMMERCE BEFORE DUE DATE OF RETURN OF INCOME. 6.1 AFTER CONSIDERING THE TOTALITY OF FACT, THE RIV AL SUBMISSIONS, THE APPLICABLE LAW AND ON THE BASIS OF DISCUSSION MENTIONED ABOVE, I H AVE CAME TO THE CONCLUSION, THE APPELLANT IS ELIGIBLE TO CLAIM THE BENEFIT OF PROVI SION OF SECTION 54 OF I.T.ACT. THEREFORE, THE A.O. IS DIRECTED TO DELETE THE ADDIT ION OF RS.1,88,18,852 ON ACCOUNT OF DISALLOWANCE OF EXEMPTION U/S 54 OF THE ACT. 4. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE LD. CIT(A) HAS GIVEN A DET AILED FINDING AND PASSED A VERY REASONED ORDER AFTER FOLLOWING TH E HONBLE BOMBAY HIGH COURT ON THIS ISSUE. WE, THEREFORE, DO NOT FIND ANY REASON TO DEVIATE FROM THE CONCLUSION DRAWN BY LD. CIT(A) AND ACCORDINGLY THE ORDER OF LD. CIT(A) IS UPHELD AS AS SESSEE WAS USING ALL THREE FLATS AS A COMPACT UNIT AND HAS ONL Y ONE ELECTRICITY BILL FOR ALL THREE FLATS. IN ANY CASE, THE ISSUE IS COVERED BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. DEVDASNAIK [2014] 49 TAXMANN.COM 30 (BOMBAY ) AS RELIED BY THE LD. CIT(A). WE, THEREFORE, UPHOLD TH E ORDER OF LD. CIT(A) BY DISMISSING THE APPEAL OF THE REVENUE. ITA NO.1507/M/2017 MR. BIPIN N. SAGAR 7 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.02.2019. SD/- SD/- (MAHAVIR SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 05 02.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.